Ratio Analysis of ICICI Bank and Lloyds Bank

Ratio Analysis of ICICI Bank
and Lloyds Bank
Submitted to Dr. Jeevan Nagarker

Submitted by SASIDHARAN RAVIKUMAR
19020241072
IB – B
Batch 2019 – 2021
Subject Financial Management (semester – II)
ICICI Bank & Lloyds Bank
ICICI Bank
• ICICI Bank is the 2nd largest bank in India with a market capitalization of 3.26 lakh
crore INR.
• Share Price : 545.80 INR.
Lloyds Bank
• Lloyds Banking Group PLC is a British multinational banking and financial services
company with a market capitalization of 52.15 billion USD.
• Share Price : 56.61 GBP.

Capital Adequacy - Capital Adequacy Ratio (CAR)
• Capital Adequacy – The amount of capital a Financial Institution holds in order
to meet the demand of financial regulator (RBI).
• Capital Adequacy Ratio (CAR) =
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
18.34 17.20 16.60 17.26 17.9 16.47
LLOYDS BANK --
22.02 21.54 21.40 21.17 22.89
Source : Bloomberg
Capital Adequacy - Advance to assets ratio
•
• Aggressiveness of a bank in lending, thus resulting in better profitability.
• Advance to assets ratio =
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
0.47 0.47 0.47 0.47 0.46 0.47
LLOYDS BANK --
0.62 0.61 0.64 0.01 0.01
Source : Bloomberg
• Higher ratio is better.
Asset Quality
• Assets of bank include Current and fixed loans, investments, cash, Government
securities of the bank.
• These assets provide returns to the bank.
• RBI measures the quality of Assets of the bank.
• Asset Quality =
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK
1.02 2.09 3.19 4.32 4.81 3.74
LLOYDS BANK
1.674 1.189 1.039 0.966 0.720 --
Source : Bloomberg
Asset Quality
• Quality of loans given by the bank can be calculated through this ratio.
• Loan Quality =
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK 1.93 3.82 5.75 7.95 9.09 7.16

LLOYDS BANK
2.93 2.09 1.88 1.71 1.28 --
Source : Bloomberg
Management - advances to deposits ratio
• Total advances to total deposits
• Indicates the ability of the bank to convert deposits into high earning advances.
• Advances to Deposits ratio =
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
1.04 0.99 0.93 0.90 0.89 0.89
LLOYDS BANK --
1.19 1.17 1.28 0.02 0.02
Source : Bloomberg
Management – Profit Per Employee (PPE)
•
• Profit Per Employee (PPE) =
• Indicates the Profits generated per employee
• Higher ratio signifies efficiency of the bank.
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
1.53 1.80 1.41 1.23 0.92 0.50
LLOYDS BANK --
1.68 1.12 2.73 4.27 6.04
Source : Bloomberg and Annual report
Earnings - Net Interest Margin (NIM)
• Earnings
- Income from all the operations which include non traditional operations also.
• Net Interest Margin Ratio =
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
2.62 2.71 2.72 2.60 2.46 2.61
LLOYDS BANK
1.27 1.41 1.23 1.30 1.72

--
Source : Bloomberg
A good company will be able to generate more interest income with lesser assets.
Earnings - ROA
• Return on Assets is one of the methods to which is used to measure the
earnings of the bank.
• ROA measures how profitable a bank’s assets are
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
1.48 1.48 1.11 1.03 0.69 0.34
LLOYDS BANK
0.17 0.11 0.32 0.41 0.55 --
Source : Bloomberg
Liquidity
• Liquid assets to total assets
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
7.7 7.3 8.8 10.2 10.4 7.1
LLOYDS BANK
16.46 17.37 17.40 15.64 36.18 --
Source : Bloomberg
• Liquid assets to total deposits

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
16.6 16.0 18.5 20.2 20.5 13.3
LLOYDS BANK
31.48 33.49 34.46 30.57 69.33 --
Source : Bloomberg
Liquidity
• Banks ability to converts its assets into cash
• Cash maintained by banks and cash held by Central bank to total assets.
• 1. SLR -- =
• 2. CLR -- =
(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
ICICI BANK
(CLR) 1.9 1.8 1.9 2.0 2.0 2.1
ICICI BANK
(SLR) 9.97 9.73 9.76 10.10 9.85 9.82
Source : Bloomberg

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Ratio Analysis of ICICI Bank

and Lloyds Bank

Submitted to Dr. Jeevan Nagarker

• Share Price : 545.80 INR.

• Share Price : 56.61 GBP.

• Capital Adequacy Ratio (CAR) =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

• Advance to assets ratio =

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

ICICI BANK 1.93 3.82 5.75 7.95 9.09 7.16

• Advances to Deposits ratio =

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

• Indicates the Profits generated per employee

• Higher ratio signifies efficiency of the bank.

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

• Net Interest Margin Ratio =

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

1.27 1.41 1.23 1.30 1.72

• ROA measures how profitable a bank’s assets are

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

• Liquid assets to total deposits

(%) FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

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